Implementation of Corporate Governance Structures will help South African companies Achieve Success – Adedipupo Osinloye
SALM TEAM 
In a chat with Adedipupo Osinloye, one of the Africa’s leading Financial Risk Management experts and the author of the book: Current Trends in Corporate Governance: Leadership Perspectives, he shed light on the importance of corporate governance as a sine qua non for organisations in South Africa that desire sustainable and lasting success. He noted that Corporate Governance is something altogether different from the daily operational Management activities enacted by a company’s executives. It is a system of direction and control which dictates how a board of directors governs and oversees a company, he said.
According to Adedipupo, one of the biggest purposes of Corporate Governance is to set up a system of rules, policies, and practices for a company – in other words, to highlight accountability. Each major piece of the “government” – the shareholders, the board of directors, the executive management team, and the company’s employees – is responsible to the others, therefore keeping them all accountable. Part of this accountability is the fact that the board regularly reports financial information to the shareholders, which reflects the Corporate Governance principle of transparency. He stated that the fastest way to crash an organisation is to exclude the operations of transparency and accountability.
Adedipupo further stated that perhaps one of the most important principles of corporate governance is the recognition of shareholders. The recognition is two-fold. First, there is the basic recognition of the importance of shareholders to any company – people who buy the company’s stock fund its operations where equity is one of the major sources of funding for businesses. Second, from the basic recognition of shareholders’ importance follows the principle of responsibility to shareholders. The policy of allowing shareholders to elect a board of directors is critical. The board’s ‘prime directive’ is always to seek the best interests of shareholders. The board of directors hires and oversees the executives who comprise the team that manages the day-to-day operations of a company. This means that shareholders, effectively, have a direct say in how a company is run, he noted.
He explained that South Africa has a made considerable progress in the area of Corporate Governance, being a member of G20 and as such works closely with other members for the implementation of international best practice in financial and market regulation. He elaborated that she has also taken a global lead in the adoption of the Integrated reporting, a fact that had influenced its Corporate Governance Practice and its various regulatory codes.
However, he posited that effective implementation of corporate governance has not been at the optimum level with room for improvement . ‘In fact, private companies often, focus on the management of their business rather than its governance. He specifically mentioned that South African governance does not give superior attention to shareholders.
We must have a stakeholder-inclusive regime with strong monitoring by the government. Any organisation, even if it is an SME or start-up must be well regulated in order to succeed’. Adedipupo Osinloye concluded.
For more on Adedipupo Osinloye:
URL: www.Yenkosiafrica.net
LinkedIn: https://www.linkedin.com/in/dipo-adeda-osinloye
About Author
